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APPENDIX 2:

STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS (SWOT) ANALYSIS

CONDUCTED FOR SPECIFIC FREIGHT-RELATED INDUSTRIES

 
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2 STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS (SWOT)

ANALYSIS CONDUCTED FOR SPECIFIC FREIGHT-RELATED INDUSTRIES

2.1 SWOT Analysis

As part of the freight plan’s economic assessment, a Strengths, Weaknesses,

Opportunities and Threats (SWOT) analysis was conducted for five different industries:
Automobile Distribution, Final Mile, Fuels, High Tech Manufacturing, and Warehousing.
The purpose of the SWOT analysis was to better understand the strengths and
weaknesses of Rhode Island’s logistics and shipping industry. The analysis also identifies
opportunities to improve logistics and shipping in Rhode Island and provides insight on
potential threats to the supply chain that could impede the ability for businesses to ship
and receive goods and services. The SWOT analysis was based on available data and
interviews with key stakeholders. The findings are provided below, and the complete
analysis is provided in the Appendix of this freight plan.

2.1.1 Automobile Distribution

Rhode Island’s freight infrastructure and facilities currently support four different
automobile distribution operations: international imports, regional domestic distribution,
international exports, and final mile distribution to dealerships in Rhode Island.

 Rhode Island receives automobiles through the Port of Davisville, including

Volkswagens, Audis, Porches, Bentleys, Subarus, and Hondas manufactured in
Europe, Mexico, and Japan. The Port of Davisville handles approximately 11
percent of the automobiles imported into the United States. The majority of these
international imports from large automobile manufacturers are distributed
regionally within the United States.
 Also located at the Port of Davisville, North Atlantic Distribution (NORAD) acts as
the regional distribution and processing hub for domestic automobiles. From
2011-2014, approximately 25,000 cars and trucks were brought annually to
Davisville by rail from Ford and Subaru’s US manufacturing facilities and then
distributed by truck to dealerships within the Northeast.
 Used automobiles are exported through ProvPort. In 2014,19,264 units were
shipped on 24 vessels, largely to the West African ports of Lome, Togo; Cotonou,
Benin; and Lagos, Nigeria.
 New vehicles are shipped within Rhode Island from regional distribution locations
to individual dealerships. These new automobiles are transported via trucks and
frequency of deliveries is dependent upon car sales.

The key Strengths or Opportunities of Rhode Island’s Automobile Distribution industry are:

 National market for car sales

 No harbor maintenance tax for Davisville and uncongested portside-landside
interface
 Opportunity to attract market share from other nearby facilities
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 Potential to reload empty returning rail wagons

 Truck Driver shortage – more long haul distribution by rail may be possible

The key Weaknesses or Threats include:

 Competing ports in the region (e.g., Baltimore)

 Rhode Island’s location does not favor exports of new vehicles
 Changes in car production dynamics, regulation/taxation abroad
 Sizes of pure car carriers (PCC)and tri-level auto racks are increasing and there
may be draught issues at Davisville

The complete SWOT analysis for Automobile Distribution is provided in Table 1.

Table 1: Automobile Distribution SWOT Summary

STRENGTHS
 The automotive industry in the US accounts
for approximately 3.5 percent of US gross
domestic product.1 According to
Fortune.com, the US has experienced
increasing annual car sales over the last
five years, 16.5 million sold in 2014, versus
10.4 million in 2010. A further strength is that
the average age of a car in the US is 11
years, and age and maintenance issues
will eventually require people to purchase
a newer vehicle.
 32.4 million people are located within a
four-hour drive of Providence, a significant
market for car importers and dealerships
selling new cars and for the export of used
cars.
 No harbor maintenance tax for Davisville –
the only major car importer port without it.
This amounts to $30 to $40 per imported
automobile.
 Davisville has an uncongested portside-
landside interface. This lack of congestion
typically results in more reliable and
efficient operations.
 Automotive import and export operations
require significant space to stage cars
WEAKNESSES
 The import car handling and processing
market is a very competitive market with
ports competing for trade. Examples of
competing ports with Rhode Island include
Port of Boston, New York/New Jersey and
Baltimore.
 Other competing ports are closer to larger
centers of population. For example,
Baltimore is the closest east coast auto
import/export port to both the Midwest and
population centers on the east coast.
 While other ports such as Baltimore,
Brunswick and Charleston have benefitted
from increasing US car exports, Rhode
Island’s location does not favor exports of
new vehicles. These ports are typically closer
to the traditional centers of US car
manufacturing and newer plants in the
south of the country.

1 Select USA. The Automotive Industry in the United States.

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efore and after unloading/loading from a
ship, and staging prior to distribution to
dealerships. Unlike other car import ports
across the US, Davisville has room for
expansion. ProvPort also has potential to
expand with the redevelopment of 9.3
acres.
 New England is recognized as a net
importer of goods, which typically leads to
trucks leaving New England empty. This
also applies to trucks delivering cars into
New England. Cars imported at Davisville
help reduce the flow of empty southbound
specialized car carrying trailers.
OPPORTUNITIES
 While proximity to other car handling
operations can be viewed as a threat, it
can also be viewed as an opportunity to
attract market share away from those
facilities. Issues associated with port
congestion, significant challenges
associated with expanding port facilities,
poor labor relations, all affect factors such
as cost, performance, productivity,
reliability and flexibility that automotive
logistic managers consider when locating
their operations.
 The use of larger vessels, but fewer sailing
frequencies is likely to put pressure on
existing ports’ capabilities to stage and
store vehicles. Ports such as Davisville, with
room to expand, may capture importers
who are capacity-constrained and need
to relocate.
 The truck driver shortage is expected to
result in some longer distance cargoes,
which could include automobiles, being
transferred to rail, and facilities such as
Davisville being increasingly used for
domestic distribution.
2 Detroit Free Press, June 15th 2015.
THREATS
 The most significant threat, but also an
opportunity, is that the automotive sector is
changing where it produces automobiles.
This affects distribution channels.
Automotive production is now undertaken
on a global basis by the main automotive
companies. Companies decide where car
plants are located based on many factors,
including access to domestic and regional
consumers, exploiting trade agreements
such as NAFTA, and accessing low-cost, but
quality manufacturing labor markets. This
change to global production has seen car
manufacturing centers move away from
traditional locations in North America and
Europe to countries such as Mexico. In North
America, Mexico produces about one in
five cars; this is expected to grow to one in
four by 2020.2 Furthermore, new car plants
and additional production capacity in
states such as Alabama, Tennessee, South
Carolina and Georgia, for car
manufacturers such as Mercedes Benz and
BMW, have reduced imports to the US from
European facilities. US-produced cars for
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 Mexico car production is increasing and
may be an opportunity, depending on
how cars are exported from the country
(i.e., by rail or marine vessel). It currently
represents 25% of Davisville’s volume and is
growing.
 Railcars bringing automobiles into Davisville
typically return empty to either an
intermediary point or back to the Midwest
production centers. One opportunity is to
explore how these empty rail cars can be
loaded with imported cars to improve the
efficiency of the rail network and reduce
truck movements.
3 Central Massachusetts Regional Planning Commission.
domestic consumers are more likely to be
transported by rail and truck to dealerships.
 Production facilities in Mexico typically serve
US distribution operations directly with rail.
This is not always the case, however, as
shown with VW’s use of a round-trip-shipping
service that maximizes use of vessels by
loading cars in Europe and offloading at
ports along the US east coast. The ship then
loads Mexican-produced cars for offloading
at east coast ports on the return journey
back to Europe.
 While some Mexican car production export
car operations use east coast ports such as
Veracruz, other centers of production, such
as Nissan’s production site at
Aguascalientes, are closer to the Mexican
west coast. This is also likely to result in more
use of rail transport for cars destined for the
US, rather than the use of short sea shipping.
Larger vessels and reduced sailing
frequencies could see increased port
congestion and capacity issues at ports in
Mexico and reduce exports by short sea
shipping.
 Automotive ports are vulnerable to storms
and especially flooding. In 2012, Super Storm
Sandy damaged 16,000 cars at Newark,
largely due to flooding. The proximity of car-
staging facilities close to areas that are
vulnerable to flooding and storm surges is
likely to be an increasing concern over the
long-term with future sea level rises.
 Rhode Island is in close proximity to other
car-handling facilities. There are other
existing rail-served car terminals throughout
New England, including the New England
Automotive Gateway located in East
Brookfield/Spencer, MA (which has a
capacity to process 200,00 vehicles per
annum) 3 and the import/export operations
focused at the Newark terminals of the Port
of New York and New Jersey which, in 2014,
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handled 392,749 units.4

 Nigeria is one of the largest importers of
used vehicles from the US5 However, a
number of vehicle manufacturers are
establishing car assembly plants in Africa,
which could reduce the demand for
imported vehicles, including those passing
through ProvPort. Additionally, an increase
associated with import taxes on cars by
West African countries could affect
demand. Nigeria recently increased import
duty from 35 percent to 70 percent for
previously owned vehicles.
 The size of pure car carriers (PCC) and pure
car truck carriers (PCTC) is increasing. Post
Panamax ships, with a carrying capacity of
8,500 car equivalent units (CEU) are being
introduced. These vessels have a draft of
nearly 34 feet, which if fully loaded would
prevent such vessels from serving Davisville.
The size of PCCs and PCTCs vessels
operating into Davisville and ProvPort are
typically in the 6,000 to 7,000 CEU range.

2.1.2 Final Mile

The term “Final Mile” is often used to describe the final phase of the movement of
freight to a receiver or consumer. Examples of final mile deliveries include:

 A home delivery package from Amazon for example, to a Rhode Island

resident
 Medical supplies and consumables to a hospital
 Food and alcohol to a restaurant
 Retail goods to a shop
 Components to a manufacturer
 Cash to a bank
 Heating oil to a home
The final mile is a critical part of the overall supply chain as it is where title and
ownership of goods typically changes hands from the shipper to the receiver. Other

4Automotive Logistics Magazine.

5Department of Commerce, US Commercial Service, Global Automotive Team, Quarterly Newsletter Spring
2015.
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dynamics also influence the final mile delivery including delivery timing (which could be
imposed by the shipper or receiver or decided by the freight company), size of delivery
truck and special handling requirements such as product temperature control and
hazardous materials. Many deliveries to consumers are undertaken on a multi-drop
basis, where the delivery vehicle makes between 20 and 50 deliveries a day. For some
package delivery companies, this is much higher. The Council of Supply Chain
Management Professionals estimates that as much as 28 percent of all transportation
costs occur in the last mile.

The key Strengths or Opportunities of Rhode Island’s Final Mile Distribution industry are:

 Proximity to Boston/NY and major port-of-call for fuels

 Good highway network
 Access to wide range of freight transportation modes
 Opportunity to increase alternative fuel delivery vehicles
 Alternative Delivery solutions (e.g., lock boxes, consolidation)
The key Weaknesses or Threats include:

 Loading capacity in some locations (e.g., Newport)

 Access constraints for larger vehicles and bridge weight
 Existing and future congestion
 Limited warehousing space in Rhode Island
The complete SWOT analysis for Final Mile Distribution is provided in Table 2.
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Table 2: Final Mile Distribution SWOT Summary

STRENGTHS
 Rhode Island’s proximity to suppliers and
shippers in the metropolitan areas of New
York and Boston. This includes food
wholesale markets such as the New
England Produce Center (Chelsea, MA)
and New York’s Produce, Meat and Fish
markets (Hunts Point, NY).
 Access to good highway networks.
WEAKNESSES
 On-street loading capacity at certain
locations such as Bristol, Newport,
Providence, Wakefield, Warren.
 Access and geometry constraints for
larger vehicles in areas such as
Providence.

OPPORTUNITIES THREATS
 Off-hour deliveries. Pilot trials have found  Constrained truck driver supply can also
that delivery productivity and fuel impact final mile deliveries, though the
efficiency increase when undertaking off impact in this particular segment of the
hour deliveries. It can also reduce trucking industry is expected to be less
congestion by removing trucks from peak than longer distance trucking, due to two
travelling times. main characteristics: 1). Lifestyle – The
 Increasing the number of alternative majority of final mile delivery drivers will
fuelled vehicles to improve air quality and return home at the end of the day, unlike
reduce greenhouse gas emissions. Final longer distance truck drivers; 2).
mile deliveries tend to be short in length. Commercial driver’s license (CDL) – Only
Many urban delivery trucks travel less than trucks above a gross vehicle weight rating
100 miles per day, which are within the of 26,001 pounds require a driver to have
operating ranges of small electric trucks. a CDL. A significant proportion of final mile
Trucks always returning to a home base at delivery trucks operate under this weight
the end of the working day could utilize limit and so access to a wider driver
Liquid Natural Gas (LNG) or Compressed market is possible.
Natural Gas (CNG) fuels, as the fueling 
requirements often mean that LNG or
CNG fuelling facilities are not always
readily available and at convenient
locations.
 Manage short-term, on-street truck
parking outside local businesses,
improving deliveries and reducing impact
of stopped delivery vehicles on other road
users.
 Identify optimal local commercial and
truck routes for access to local business
and truck generators including
warehouses, distribution centers,
intermodal facilities, manufacturing
facilities, and landfill/resource recovery
locations.
 Improve roadway geometry when
identifying local commercial routes or
when trying to optimize them for truck
traffic, as it is important to recognize that
trucks require different roadway geometry
than passenger vehicles. Consider
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characteristics to improve roadway

geometry including pavement quality,
roadway and shoulder widths, turning
radii, signage, advanced access
management, dedicated left- and right-
turning lanes and traffic signal timings.

2.1.3 Petroleum/Fuel

Rhode Island plays a prominent role in the distribution of refined petroleum and fuel
products to residents and consumers in New England. Fuel products include gasoline,
fuel oil, diesel and propane, also known as Liquid Petroleum Gas (LPG).

Rhode Island’s fuel supply chain relies on water transportation to bring refined
petroleum products into the region from refineries located in New Jersey and
Pennsylvania, but also from Canada and further afield, namely Great Britain and the
Netherlands. In 2013, terminals in the Port of Providence received 36 percent of
petroleum products by US domestic shipment, 29 percent from Canada and 35 percent
from other foreign ports. As shown in Figure 2, the fuel and petroleum is then distributed
by rail or truck within the state or region. Rhode Island’s petroleum/fuel distribution is
multi-modal and relies heavily on marine access at the Port of Providence, as shown
below.

Figure 2: Rhode Island Petroleum/Fuel Distribution Flow Chart

Barge/Truck Other fuel

terminals
Ethanol

Residential
Rail

Motiva Industry
Domestic
refineries Providence
Terminal Gas station
RI Bulk Fuel Truck
Ship/Barge Terminals
Airport
Exxon East
International Providence
refineries Terminal
Other fuel
terminals
outside of RI
Pipeline

Springfield, MA
Terminal
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Trucks are used to distribute product from the bulk fuel terminals to end users who are
typically located within a 75-mile radius of the various fuel terminals. Rail is also used for
the transportation of other petroleum related products, including ethanol and LPG.
Ethanol is a biofuel and is typically blended with gasoline to produce E10, a blend of 90
percent gasoline and 10 percent ethanol. The blending process often occurs when fuel
is loaded to the delivery tanker at the fuel terminal. The majority of the US-produced
ethanol originates from the agricultural Midwest. Unlike other parts of the US, Rhode
Island is not experiencing a surge in rail transport associated with domestic oil
transportation. This rail movement is focused on moving crude oil from domestic
production sites such as the Bakken Formation in North Dakota to oil refineries across
the US and Canada. This increase in rail traffic is largely due to domestic crude oil
sources either not being connected to a crude oil pipeline network or suffering a lack of
pipeline capacity.

In 2013, Rhode Island terminals had a 40 percent market share of the distillate fuel oil
imported through facilities in the Port of Boston, New Bedford, Fall River, Providence,
New London, and the Thames River. This excludes the Tiverton terminal, as this location
is included in Fall River for US Army Corps of Engineers cargo reporting purposes. Rhode
Island terminals also handled 31.5 percent of gasoline and 21 percent of residual fuel
oil, a classification describing heavier fuel oils used for ship fuel, production of electric
power and other industrial purposes.

The key Strengths or Opportunities of Rhode Island’s Petroleum/Fuels industry are:

 Multi modal fuel terminals – recent reinvestment

 32.4 million people within a four-hour drive
 Home heating oil
 Transportation-related consumption
The key Weaknesses or Threats include:

 Queuing and wait times at terminals

 Hazmat restrictions at Providence rail station
 Home heating alternatives becoming increasingly available
 Lower transportation fuel demand in future
 Weather impacts on fuel supply chain
The complete SWOT analysis for the Petroleum/Fuels industry is provided in Table 3.
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Table 3: Petroleum/Fuel SWOT Summary

STRENGTHS WEAKNESSES
 Six water served fuel terminals are located  Queuing and wait times at Rhode Island
in Rhode Island: fuel terminals have been cited by industry
o Sprague Operating Resources LLC - as an issue.
Providence  Restrictions associated with Hazmat
o NE Petroleum Terminal LLC materials passing through the Providence
o Capitol Terminal Company train station create additional operational
o Motiva Enterprises LLC complexity for moving these materials to
o ExxonMobil Oil Corp. destinations south of the train station. This
o Inland Fuel Terminal, Inc. includes the rail-served Motiva ethanol
 Heating fuel oil remains a key fuel source terminal at the Port of Providence and the
for home heating. In 2013, 32.6 percent of propane facility at Davisville.
households in Rhode Island, 31 percent in
Massachusetts and 43.7 percent in
Connecticut used fuel oil for home
heating. In New England, 60 percent of
home energy consumption is related to
space heating, versus the US average of
41 percent.
 Significant volumes of petroleum product
are consumed in the transportation sector
and this is expected to continue in the
short- to mid-long-term. In 2013, energy
expenditure associated with the
transportation sector in Rhode Island
amounted to $1,685 million, 0.2 percent of
the US share.
 Proximity to T.F. Green Airport, which
consumes 27.5 million gallons of fuel per
annum. For reasons of fuel resiliency, 25
percent of fuel is sourced from
Connecticut and Massachusetts.
 Rhode Island’s location means it can
source fuel from Canada, US domestic
sources, and further afield such as Europe.
 Of the 12 major power generating plants
in Rhode Island, six of them have a dual
fuel capability utilizing fuel oil.
 Motiva’s terminal also exports ethanol
from Rhode Island using barge services.
 Rhode Island hosts one of the two New
England LPG import terminals. The other is
located in Newington, New Hampshire. A
propane-served rail facility also opened
recently in Davisville to receive domestic
shipments of LPG.
 Newport Biodiesel is a company that
collects waste vegetable oil from Rhode
Island’s restaurants’ oil and converts it into
biodiesel for use in diesel engines and
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home heating furnaces. It is one of 101
biodiesel producers in the US
OPPORTUNITIES
 Reducing truck queuing time at terminals
and improving terminal access could
improve driver schedules and vehicle
productivity. At times of high demand,
terminals could operate a slot system,
giving drivers more certainty over arrival
and departure times and reducing
queues on surrounding streets and
neighborhoods.
 Increasing demand in the use of biofuels.
The Rhode Island Biodiesel Heating Oil Act
of 2013 requires No2. distillate sold in the
state to contain five percent of a bio-
based product by 2017. While this may just
substitute fossil fuel volume for a biomass
volume, it does provide opportunities for
companies that have invested in biofuel
transport infrastructure, such as Motiva.
 In March 2015, the Defense Logistics
Agency (DLA) posted a notice to seek
interest from businesses capable of storing
and distributing the North East Home
Heating Oil Reserve (NEHHOR). The
NEHHOR was established by the
Department of Energy (DOE) in 2000 to
provide an emergency stock of heating
oil in the event of a winter supply
shortage. The DLA is seeking responses for
three areas: New York Harbor (250,000
barrels), Boston (500,000 barrels), and
coastal Connecticut and Rhode Island,
including Providence, New
London/Groton, New Haven and
Bridgeport (250,000 barrels). Currently no
fuel terminals in Rhode Island are part of
the NEHHOR, and the DLA notice presents
a potential business opportunity for Rhode
Island terminals. It is also an opportunity
for the state to improve its resiliency by
easing access to fuel stocks during a
THREATS
 Demand for residential heating fuel oil is
declining as people transition to natural gas
and other forms of fuel for home heating, as
well as more fuel efficient systems. US Energy
Information Administration (EIA) Annual
Energy Outlook 2015 identifies fuel distillate
consumption declining by 2.7 percent per
year (nationally). Between 2002 and 2012,
Rhode Island experienced a 22 percent
drop in the demand for home heating oil
from 129.2 million gallons to 101.2 million
gallons.7 Sales of kerosene have also
declined significantly. In 2008, 630 thousand
gallons were sold in Rhode Island, but in
2013, this had reduced to 274 thousand
gallons.
 Movement of fuel by water can be affected
by weather; for example, icing of the
Narragansett Bay and storms or hurricanes
can close or damage port facilities
affecting fuel stocks and pricing. Icing of
marine highways during significant cold
snaps also coincides with high demands for
heating products.
 Reducing travel demand, resulting in lower
vehicles miles travelled, will impact fuel
consumption within the transportation
sector. Improved fuel efficiency of motor
vehicles will also reduce fuel consumption.
 Greater awareness of fossil fuel impacts
upon the environment and government
policies to reduce greenhouse gas emissions
are influencing consumers in selecting
“greener” products (e.g., low emission and
zero emission vehicles). This factor may also
impact fuel consumption by trucking fleets
through the uptake of compressed and
liquid natural gas fuels.
 Competition from other ports outside of
Rhode Island can influence where fuel is
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supply disruption. landed. Boston, Groton and New Bedford

 The NEHHOR6 was established with a two can access some of Rhode Island’s fuel
million barrel stockholding to provide a 10- market.
day supply, because ten days was  Lack of hazmat-trained drivers could
identified as the necessary time to bring increase transportation costs.
additional fuel from Gulf coast ports to  Truck access to the western terminals in
the Northeast. Fuel supplies would be held Providence Harbor to I-95 south means
in commercial facilities and DOE would trucks have to traverse local streets.
establish contracts with storage suppliers. Community concerns and any resulting
In 2011, two contracts were awarded to restrictions on truck movements could
terminals in Groton, Connecticut and influence the cost-competitiveness of these
Revere, Massachusetts. In 2012, the fuel terminals.
reserve was reduced to one million barrels
and currently stocks are stored at two
terminals, 500,000 barrels at Groton and
500,000 barrels at Revere Releases from
the NEHHOR were authorized following
Super Storm Sandy and severe winter
conditions during November 2012.
 Other fuel terminals outside of Rhode
Island constitute the Northeast Gasoline
Supply Reserve, which holds one million
barrels of gasoline distributed across
terminals in the New York harbor area,
Boston and South Portland, Maine. This is
the first federal regional refined product
reserve and was established in 2014,
largely as a result of the fuel supply issues
following Super Storm Sandy. Contracts
for the purchase and storage of fuel were
placed in the summer of 2014.

7 Congressional Research Service, “The Northeast Heating Oil Supply, Demand, and Factors Affecting is

Use.” http://nationalaglawcenter.org/wp-content/uploads/assets/crs/R43511.pdf.
6 According to the US Department of Energy, this reserve gives Northeast consumers supplemental fuel

supplies for approximately 10 days, the time required for ships to carry additional heating oil from the Gulf
of Mexico to New York Harbor. During 2011, the Northeast Home Heating Oil Reserve (NEHHOR) was
converted to a one million barrel Reserve and the fuel stored was changed from No. 2 heating oil to
cleaner burning ultra-low sulfur distillate (ULSD).
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2.1.4 High Technology Industry

A number of definitions exist to describe high technology manufacturing. For the

purposes of this analysis, the plan used the industries identified by the Bureau of Labor
Statistics (BLS) in 1999, which are based on SIC codes and were updated to reflect the
NAICs codes in 2003. The BLS definition: “An industry is considered high tech if
employment in technology-oriented occupations accounted for a proportion of that
industry’s total employment that was at least twice the 4.9-percent average for all
industries.” According to an analysis of the Commerce Rhode Island’s Manufacturers’
database, there are approximately 199 companies within Rhode Island that can be
classified as High Tech Manufacturers.

High technology manufacturing relies upon freight transportation to support the

inbound flow of raw materials and components that are processed to form
manufactured articles and the outbound movement of those articles to customers
worldwide.

Characteristics associated with inbound flows include:

 Chemicals arriving in bulk form are likely to be transported by road and rail
from domestic sources. Some chemicals such as Sodium Hydroxide arrive by
ship from foreign sources and are processed through the Port of Providence.
 Small, high value components tend to be shipped using packaged services
such as FedEx and UPS.
 Trucking is the mode that will be used to deliver the majority of inbound
products to Rhode Island’s manufacturing facilities.
Outbound freight transportation attributes include:

 The movement of consignments to international destinations will typically be

in intermodal containers and use the ports of Boston and New York/New
Jersey.
 The movement of consignments to domestic destinations will use trucking
services, including less than full truck load and full truck load services.
 Small, high value shipments will often travel using package services and
FedEx and UPS services from T.F. Green and Boston Logan for both
international and domestic locations.
The key Strength or Opportunities of Rhode Island’s High Technology industry are:

 Access to a wide range of freight transportation modes

 Proximity to Boston, NY/NJ for exports and imports
 Northeast inbound is greater than outbound freight
- Very cost competitive outbound transport market
- High inbound trucking cost
- Driver shortage, which increases costs and may impact reliability of
trucking services
 Re-shoring could bring additional manufacturing operations to Rhode Island
The key Weaknesses or Threats include:
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 Many high tech companies are legacy based in Rhode Island. Increased fuel
and transportation costs could influence where those companies undertake
their manufacturing operations.
The complete SWOT analysis for the High Technology industry is provided in Table 4.

Table 4: High Technology Industry SWOT Summary

STRENGTHS WEAKNESSES
 Rhode Island’s high technology  The imbalance of trade flows into the region
manufacturers have access to a wide results in high inbound trucking costs.
range of global and domestic freight
transportation modes including trucking,
rail, maritime and air cargo services.
 Proximity to the ports and airports of Boston
and New York/New Jersey for those
manufacturers who export and import raw
materials and components and export
finished products.
 Feedback from the trucking industry
suggests that the imbalance of freight
moving into New England versus outbound
freight results in a very cost competitive
outbound transport market. Rhode Island
manufacturers can take advantage of this
situation.
OPPORTUNITIES THREATS
 The reshoring of certain manufacturing  Feedback from some manufacturers
activities could bring additional identified that their presence in Rhode
manufacturing operations to Rhode Island. Island is legacy related and not based upon
proximity to suppliers or customers.
Increased fuel and transportation costs
could influence where those companies
undertake their manufacturing operations.
 A constrained truck driver supply is also likely
to increase transport costs and the
imbalance of freight flows associated with
Rhode Island and the wider New England
freight market. This could impact not only
transport costs, but the reliability of freight
services.

2.1.5 Warehousing/Distribution

Warehousing and distribution facilities essentially provide two functions: the safe and
secure receipt and storage of goods, and a ready inventory to dispatch goods and
fulfill customer orders. There are significant warehousing and distribution operations in
Rhode Island, including Ocean State Job Lot, CVS, Dean Warehousing, Mancini Liquor
and Greencore. Key factors affecting business decisions about warehousing operations
include facility location, cost, size and interior configuration.
FREIGHT FORWARD:
STATE OF RHODE ISLAND FREIGHT AND GOODS MOVEMENT PLAN

Facility location is influenced by a variety of factors, including access to a plentiful

supply of labor, access and proximity to customers and suppliers, utilities (e.g., high
pressure gas line), energy costs, and the local business and regulatory environment. The
supply and suitability of existing warehouse facilities at market prices to accommodate
a company’s storage and processing requirements will influence whether a company
leases or acquires space. If supply is not adequate, the availability of suitable land and
the cost of new construction will also influence locational decisions.

Facility size is typically determined by the amount of goods a warehouse is expected to

store and the dimensions necessary to accommodate related processes such as the
picking, packing and dispatching of products. Further requirements include adjacent
hardtop for truck and trailer deliveries, as well as employee parking. Big box
warehouses (a term often used to describe warehouses over one million square feet),
are typically used within the consumer goods/retail and food and beverage sectors, to
support regional and national distribution functions for these companies. The majority of
warehouses are much smaller than that, however. Feedback from Rhode Island-based
commercial real estate companies, including representatives of Hayes & Sherry and
CBRE-New England, suggests that most companies looking for warehousing space in the
Rhode Island or southeastern New England market are seeking smaller buildings, in the
80,000 -100,000 square foot range or smaller.

Warehouse interior characteristics also influence choice and suitability of a facility to

meet a company’s needs. These include:

 Internal height. Warehouses need to be high enough to accommodate

racking that allows for the vertical storage of goods on pallets. Other more
advanced processes including automation and conveyer systems, and order
fulfillment may require mezzanine floors resulting in a need for higher
warehouses. Typically the interior height needs to be 20-30 feet.
 Space between internal supporting columns. Greater distance between
columns allows the space to be used flexibly and makes for more efficient
warehouse layouts and the ability to accommodate materials handling
equipment, such as automation.
 Number of loading docks. Having more than one loading dock allows goods
to be simultaneously received and dispatched. Warehouses dispatching high
volumes of goods will often need multiple docks.
The key Strengths or Opportunities of Rhode Island’s Warehousing/Distribution industry
are:

 Proximity to larger consumer market, good transportation access

 Land availability, pre-permitting at Quonset Business Park
 Opportunity to initiate statewide e-permitting initiative
 Identify/preserve land for future industrial and warehousing growth
The key Weaknesses or Threats include:

 Lack of warehouse supply

 Real or perceived time delays in permitting
FREIGHT FORWARD:
STATE OF RHODE ISLAND FREIGHT AND GOODS MOVEMENT PLAN
 High construction costs
 Differences between states (e.g., regulations, taxes, incentives)
 Other locations offer similar access to metro areas
The complete SWOT analysis for the Warehousing/Distribution industry is provided in
Table 5.
Table 5: Warehousing/Distribution SWOT Summary
STRENGTHS
 Proximity to large consumer market. This
is the greatest strength associated with
the warehousing and distribution sector
in Rhode Island. Companies looking to
service both the Boston and New York
metropolitan areas, and the populous
regions of New England with short order
lead times from one location, are ideally
served by being located in Rhode Island.  locally, but ultimately moving into
An estimated 32.4 million people are
located within a four-hour drive of
Providence. Proximity to population and
these metropolitan areas was a factor
identified by Greencore, which recently
opened a 107,000 square foot food
processing facility in Quonset.
 Access to I-95, I-195, I-295 and State
Route I46. A strong interstate system,
combined with good regional
connections, is an important
consideration for warehousing and
distribution businesses. Interstate 95
provides access to the Boston
metropolitan area, CT and NY. I-195
provides access to southeastern MA, and
State Route 146 to Worcester,
Massachusetts and western
Massachusetts.
 Proximity to multi-modal infrastructure.
Stakeholder outreach with the freight
community identified proximity to Boston
and New York ports and freight railroads
as an advantage. T.F Green Airport is
also viewed as an accessible amenity for
both freight and passenger traffic.
 Land availability and pre-permitting at
Quonset Business Park. The business park
managed by the Quonset Development
Corporation has available capacity and
“Pad Ready Building sites” to support
growth. The use of Uniform Development
Regulations by the Town of North
WEAKNESSES
 Lack of supply. There is a limited supply of
existing large warehouses within Rhode
Island. Feedback from local commercial
brokers indicates facility size and
configuration are more important than
location within the regional market.
Brokers cited examples of existing Rhode
Island companies looking to expand
adjacent states when warehousing
specifications could not be met in the
state.
 Age and quality of industrial space within
Rhode Island. Older buildings tend to
have lower internal heights and are space
constrained by structural columns.
Available warehousing stock often does
not match the needs of prospective
tenants.
 Lack of expansion capability. Many
warehouse sites have no planned
expansion capability and so companies
looking to grow, or consolidate multiple
smaller sites into one location, are forced
to move elsewhere.
 Construction costs to build are high
(Rhode Island construction costs are
similar to Boston market).
 Real or perceived time delays in
permitting. Although the Town of North
Kingstown has Uniform Development
regulations and streamlined approval and
permitting processes, these mechanisms
are not in widespread use across the
state.
FREIGHT FORWARD:
STATE OF RHODE ISLAND FREIGHT AND GOODS MOVEMENT PLAN
Kingstown has streamlined the approval
and permitting process and allows
construction to commence within 90
days of site control.
OPPORTUNITIES
 Incentivizing companies that are seeking
expansion opportunities of existing
warehouse space, through improved
regulatory and tax credits, to remain in
Rhode Island rather than relocating out of
the state.
 The piloting of a Rhode Island statewide
e-permitting initiative to modernize the
permitting process and expedite property
transactions can ease the regulatory
process associated with warehouse
development.
 Identification and preservation of land for
future industrial and/or warehousing
growth, and encouraging greater use of
Uniform Development regulations by
communities strategically positioned and
interested in industrial growth.
 Rhode Island already has a Foreign Trade
Zone (FTZ#105 – designated in 1984, but
modified in 2008), though this is not
currently utilized. It includes three areas:
32 acres at ProvPort, 43 acres at the
Airport Business Park near T.F. Green
Airport, and Quonset Business Park. An
outreach program to Rhode Island’s
businesses to provide company-specific
advice associated with using FTZ’s, could
be specifically targeted at Rhode Island’s
importers and warehouses.
 Include criteria within the yet-to-be-
defined Rebuild Rhode Island Tax Credit
(which provides capital to qualified real
estate projects that demonstrate a
finance gap), for the modernization and
reconfiguration of Rhode Island’s older
facilities to better serve the modern-day
needs of users of industrial and
warehousing facilities.
THREATS
 Stakeholder outreach identified a number
of companies that were originally based in
Rhode Island, but outgrew their current
facilities and moved to Fall River, where
more suitable and up-to-date warehouse
accommodation was available.
 Differences in state regulations, taxation
and schemes associated with attracting
new businesses also influence where
warehouses get developed. For example,
the Massachusetts Economic Assistance
Coordinating Council approved $2.89
million in local tax breaks and granted
$600,000 in state tax credits to Amazon
associated with the development of a new
warehouse in Fall River.
 Other areas in close proximity to Rhode
Island also offer the same locational
advantages with access to the interstate
system and proximity to the Boston and
New York metropolitan areas; for example,
the I-91 corridor between New Haven and
Hartford in Connecticut.
 Real or perceived higher costs of doing
business. Although utility costs are high
throughout New England, many
stakeholders felt the cost of utilities was
higher in Rhode Island than in adjacent
markets.
 Any increase in congestion on I-95 and
other access routes to key metropolitan
areas affects truck journey time, cost and
on-time reliability. This congestion effect
“shrinks” the market that can be cost-
effectively served by Rhode Island’s
distribution centers and warehouses.